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City plans to float deal on air rights

Officials hope to sell 9 million square feet over the Convention Center to allow denser growth elsewhere downtown and raise funds for projects.

March 14, 2007|Cara Mia DiMassa and Sharon Bernstein | Times Staff Writers

Los Angeles city officials said Tuesday that they plan to sell 9 million square feet of unused "air rights" above the Convention Center to developers -- who could add the vertical space to build housing projects elsewhere in downtown L.A. that exceed current city growth limits.

The move opens up downtown to larger and denser development at a time of growing debate across the region about overdevelopment and traffic congestion.

The developable space above the Convention Center is large enough to build the equivalent of seven 73-story U.S. Bank buildings, and city leaders expect the program to spark a new boom in residential development.

City officials said developers who buy the rights could significantly expand projects beyond what Los Angeles' zoning allows.

The city intends to sell the air rights for about $20 a square foot -- which could be a bargain for developers who would have to spend many times more to buy the equivalent amount of land.

The new program was unveiled Tuesday by Los Angeles leaders and downtown developers who hailed it as a major step in giving downtown the dense urban atmosphere of cities such as New York, Chicago and Vancouver.

But the air rights sale was met with concern from some community activists who worried it could further clog the region's roads and strain other services.

"We haven't really created any more space. That's a fiction," said Robert Scott, past president of the Los Angeles Planning Commission and chairman of the Valley Industry and Commerce Assn. "And we don't have the infrastructure to accommodate it just because somebody came up with a mathematical formula to create floor space."

At the heart of the plan, quietly approved by the City Council last week, is the space above the Los Angeles Convention Center.

Although the center is only a few stories tall, the land is zoned for high-rise development.

The city plans to sell the space above it to developers, who could take the square footage and add it to their own downtown developments.

Money collected from the air rights sale -- estimated to be about $200 million -- would go into a special trust that would be disbursed by a special community commission for certain new projects downtown, such as affordable housing and park construction.

In most of downtown, zoning rules allow high-rise developers six square feet of building for every square foot of the total lot. If developers buy air rights, they are allowed up to 13 square feet of building for every square foot of total lot.

Carol Schatz, president of the Central City Assn., said she considers the air rights ordinance the biggest step by the city to encourage downtown residential development since the late 1990s, when the passage of Los Angeles' "adaptive reuse" ordinance allowed developers to convert office buildings into housing.

"We want to see that skyline change," she said.

After decades of decline, downtown Los Angeles has seen a major rebirth in recent years fueled by an increase in high-rise condos and luxury lofts. Several towers are rising around Staples Center, while work is to begin on two Frank Gehry-designed condo towers next to his Walt Disney Concert Hall later this year.

Backers say that the added density from the air rights sale won't affect traffic because the new downtown dwellers can use the area's transit system, including subways and buses. But a recent survey showed that the vast majority of downtown's estimated 30,000 residents "rarely or never" use public transportation.

Critics also questioned whether the city was getting enough out of the deal, charging that it was underestimating the sale price for the Convention Center air rights.

The transfer of air rights is a tool that long has been used by cities to allow the preservation of old buildings while simultaneously encouraging new high-density development.

But the city of Los Angeles has never before attempted to use its own air rights to help spark more residential development -- let alone on such a massive scale.

In New York City, the sale of air rights above historic buildings, including its old theaters and Grand Central Station, was largely responsible for those buildings' preservation. The air rights over Grand Central Station were at the heart of a seminal 1978 U.S. Supreme Court decision. The court ruled that because the city granted the owner of the historic train station the ability to sell air rights, it could designate the building a landmark and limit future building on or above the site without denying its owner certain economic rights.

In Los Angeles in the late 1980s, the city granted developer Rob Maguire the right to build the Library Tower (now the U.S. Bank building) to a then-unheard of height of 73 stories by selling air rights to the old, fire-damaged Central Library. Maguire paid $51 million for air rights from the library to build two new towers nearby. That money was used to renovate the library.

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